How does PPC Advertising Work?

PPC Ads are the boxes you see at the top or to the right of search results. Google AdWords and Yahoo Advertising are the leaders in Pay-Per-Click Marketing with a 98% market share.

Advertisers specify where to place their ads and to who they should be targeted at. Accordingly, Pay-Per-Click Sites and Ad Networks like Google display their ads to the target audience. When a user clicks on a PPC Ad, the advertiser pays for the click, since it is bringing traffic to his website.

Since you may not be the only advertiser targeting users, you’ll need to bid for your ad location, when you set up your PPC campaign. Based on your bid amount and site’s relevance to the searched keyword, the search engines then use an algorithm to determine where to place your ad on the page.

How to Create a PPC Advertising Campaign?

Before you create a PPC Advertising Campaign, you need to calculate the cost per lead for your business. You can do this by calculating the total cost incurred in generating online sales for your business and the number of leads your business has acquired. Use this to find out cost per lead for your business

Since you need to bid for each keyword, you need to figure out how much you’ll spend on each keyword. You can use the cost per lead information for this. If you generate 1 sale per 100 leads, your conversion rate is 1%. So figure out how much it will cost to get 100 visitors. Learn how to monitor Ad Campaign Conversion rates using Google Adwords Conversion Tracking Tool.

Next, create a list of keywords you’ll target in your PPC Ad Campaign. Use Google Keyword Planner Tool to find out which keywords have the highest search volume and how competitive they are. The more popular a keyword, the more expensive it is. So try to find keywords with low-medium search volumes and low-medium competition. Even low volume keywords can be really useful as they bring more targeted users looking for specific things.

When you sign up for a PPC account or create Google Adwords Campaign, you’ll need to set a maximum daily budget. If you set your daily budget at $50, your ads will be displayed every day until your budget is exhausted. Your credit card will be billed monthly, based on your campaign performance.

Your ad will be ranked based on your bid amount and relevance to the searched keyword. Google also provides an Adwords Quality Score that depends on how relevant your ads are to the keywords and how good is the user experience when they visit your landing pages. Higher the Adwords Quality Score, the lower the cost-per-click and better the ranking. Here’s how you can improve your Google Adwords Quality Score.

How to Track PPC Advertising Campaign?

PPC Providers offer a variety of reports and tools to track the performance of your PPC Campaigns. You can use them to find out what search terms users have searched for, how many impressions did your ad get for each keyword, how many users clicked-through to your site and what it has cost you.

You can combine it with a web analytics tool such as Google Analytics to find out what your users did after they arrived on your site via your PPC Ad.

Regularly Monitor how your keywords perform and remove the ones that don’t generate any clicks or don’t convert into a sign up even after the clicks.

Google Adwords provides tons of options to customize your PPC Campaign based on geography, language, device, and more. You can target users based on country, city, state, province and even zip codes. You can even target people within a set radius of an address, for example, within 3 miles of Hell’s Kitchen, New York City.

You can use Google Adwords Preview Tool to see if your Google Ads appear for your target keywords, how they look on different devices and improve them.

About Sreeram Sreenivasan

Sreeram Sreenivasan has worked with various Fortune 500 Companies in areas of Business Growth, Sales & Marketing Strategy. He’s the Founder of Ubiq BI, a cloud-based BI Platform for SMBs & Enterprises.